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Mr. Miller 50, Irs 43, Us 27, Mr. George 24, The Irs 24, Cincinnati 15, America 12, Washington 9, Ms. Lerner 7, Mr. Shulman 6, Shulman 5, Lerner 4, Brad 3, Tigta 3, Levin 3, Mr. Rangel 3, Miller 3, Douglas Shulman 3, Mr. Nunes 3, Mr. Thompson 3,
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  CSPAN    U.S. Senate    News/Business.  

    May 17, 2013
    9:00 - 12:01pm EDT  

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they all understand this is a priority and we will not stop until we've seen this scourge, from what is the greatest military in the world, eliminated. thank you very much, everybody. >> next on c-span2 we are live at the capitol hill where the ways and means committee this morning hold a hearing investigating iran's internal report revealing that the agency targeted conservative groups -- irs internal report revealing that the agency targeted conservative groups. we'll hear from the acting commissioner steve miller who was asked to resign wednesday as well as the testimony this morning from the treasury department inspector general for tax administration. center of your screen that is steve miller who will testify. we've also learned that former
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irs commissioner douglas shulman who is at the helm of the agency during most of the period in which the irs employers were targeting conservative groups will testify before the house oversight committee next wednesday. mr. shulman no longer in government agreed to testify voluntarily, no word yet on whether the head of the irs tax exempt division will testify at the hearing. this hearing before ways and means should get underway shortly. one more note, president obama yesterday tapped a new head, acting head of the irs. it would be danny werfel who is with the office of management and budget, the "washington post" writing this morning that mr. werfel rose through the rank at omb and the justice department as a budget analyst and a lawyer before president obama tapped into serve as omb comptroller in 2009. live coverage here on c-span2. [inaudible conversations]
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>> the committee will come to order. on may 10, lois lerner, director of exempt or positions for the internal revenue service division that oversees tax-exempt groups finally acknowledged at a decent been targeting conservative leaning political organizations. four days later, the treasury inspector general for tax administration confirmed that and i quote the irs used inappropriate criteria to identify organizations applying for tax exempt status, end quote. the report also confirmed that this power began as far back as 2010. this revelation goes against the very principles of free speech and liberty upon which this country was founded. the blatant disregard with which the agency has treated congress and the american taxpayer raises
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serious concerns about leadership at the irs. let's establish the facts that we do know. based on the ticket report we know that for an 18 month period beginning in spring 2 20 irs employers and agencies determination june the employed keywords such as tea party, patriot, and 9/12, to target applications for tax exempt status. these groups within subjected to further irs investigation and document requests. irs employees later expanded their search to include groups concerned about government spending, debt, taxes, the constitution, the bill of rights, trying to come and go, make america a better place to live, end quote. let me repeat that. people were targeted for trying to make america a better place to live. these americans had of their applications delayed for nearly three years, and at least 98
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applicants were asked for an improper, and appropriate information such as donor list and whether family members planned to run for political office. during that delay and while applications of conservative groups sat untouched for more than a year, other applications with names like progress and progressive were approved in just a matter of months. the headline in "usa today" from earlier this week really says it all. irs gives liberals a pass, tea party groups put on hold. pennines audit found some of those cases should been set aside because of concerns related to their potential political activity. but no such review was done. without objection i entered "usa today" news report into the record. this week we learned a senior irs officials knew about this activity almost two years ago in june of 2011, and irs's leadership in washington knew of in may 2012, a year ago. despite a two year longnby
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the i has never told the american people or their representative about this simple truth. in fact, we were repeatedly told no such targeting was happening, that isn't being misled, that's lying. but now we know the truth, or at least some of the. we also know that these revelations are just the tip of the iceberg. it would be a mistake to treat this as just one scandal. this may be one, this may be the one generating headlines but in total i count at least five serious violations of taxpayer rights, the right to be treated fairly, honestly, and impartially by their government. first back in august of 2010, a white house official discussed the status of a private company, the tax status of a private company, a clear intimidation tactic. second in june of 2010, the targeting of conservative groups began. third, in may of 2011, the irs start to threaten donors to conservative leaning nonprofits, that they were liable for
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certain taxes. and forth, in march 2012, the "huffington post" published a confidential to thousand eight donor list of the national organization for marriage, a concerted tax-exempt organization. and fifth, but unlikely the final transgression, propublica announced that the irs had leaked confidential applications for tax exempt status from conservative groups. mr. miller, with all due respect, the systematic abuse cannot be fixed with just one resignation, or too. and as much as i expect more people need to go, the reality is this is not a personnel problem. this is a problem the irs being too large, too powerful, too intrusive, and t too abusive of honest, hard-working taxpayers. there isn't a person i come into contact with him or anyone in this country, frankly, i does not fear the irs. they fear getting something wrong on the tax filing, and they fear the irs's ability to audit them and we have in their
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lives, especially when all they're trying to do is improve their lives. let alone, god forbid, trying to make america a better place to live, which is what the irs targeted them for. under that kind of thinking, every civic group in america is at risk. the knights of columbus, the rotary, the jaycees, the american legion, vfw clubs. i'm sure you're aware of the same that the power to tax is the power to destroy. well, under this administration the irs has abused its power to tax, and it has destroyed what little faith and hope the american people had in getting a fair shake in washington. this will not stand. trimming a few branches will not solve a problem when the roots of the tree have gone rotten. and that is exactly what happened with our entire tax system. it is rotten at the core and it must be ripped out so we can start fresh. only then will the american people get a tax system that treats them fairly and honestly
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as they deserve. wow that's a larger discussion, it is directed tidied issue before us today. how and why our tax system has gone so far off track, many questions still remain. why do the irs repeatedly target the american people and then keep that fact covered up for so long? who started the targeting? who knew? when did they know? how high did it to? who leaked the private taxpayer information? why would the names of donors asked for? and what was done with those lists before they were supposedly discarded as and when did the administration know about each of these, and what was its reaction? listening to the nightly news this appears to be just the latest example of a culture of cover-up and little intimidation in this administration but it seems like the truth is hidden from the american people just long enough to make it to an election. the american people have a right to the truth, to a government that delivers the facts, good or bad, maat.
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president obama promised to be different than to deliver a better government than most transparent in history. he was right. america deserves better. it is time to end the corruption at the irs and fix a tax code that allows washington and the irs to pick who wins and who loses in america. i expect nothing less than total cooperation by the irs and this administration as we investigate what happened, and what we must do to fix it but i now recognize ranking member levin for the purpose of his opening statement, and thank him for his commitment to pursue this issue. >> thank you, mr. chairman. i'm going to read my opening statement. i will expand on it a bit now that i've heard the opening statement of chairman. this committee on a bipartisan basis takes seriously its oversight role, and we are fully committed to ensuring an irs
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that serves the american people fairly and efficiently. what is now completely clear is that the management and oversight of the agency's handling of tax exemption applications have completely failed the american people. i emphasize that. as we know from the inspector general's audit, the agency used totally inappropriate criteria in its review of tax exemption applications, singling out organizations for review based on their name or political views, rather than their actual activities. these criteria change four times over two years, with little management review or oversight. applications sat for years. work stopped for 13 months while
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one department waited to hear back from another. questions were asked that were not necessary. again, no oversight, no accountability. all of us are angry at this on behalf of the nation, and we're determined to get answers to our questions about how this happened to ensure that it does not happen again. finally, throughout this time, the irs leadership has demonstrated a total disregard for the oversight role of the congress and this committee. former irs commissioner shulman testified in front of us in march 2012, and said that in quotes, no targeting, end of quotes was going on. two months later -- was fully informed that indeed singling
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out by name had occurred on his watch. he had an obligation to return to this committee and set the record straight. so did mr. miller. neither fulfilled their obligations. a little more than a week ago, lois lerner was in front of our oversight subcommittee. she serves as the direct of exempt organizations division, and she has been directly involved in this matter. yet, she failed to disclose what she knew to this committee. choosing instead to do so in an aba conference two days later. this is wholly unacceptable, and one of the reasons that we believe, and as i stated several days ago, ms. lerner should be relieved of her duties. chairman camp and i put togethen
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basis to get the facts. we must seek the truth, not political gain. and i just want to add in that regard, mr. camp has said listening to the nightly news, this appears to be just the latest example of a culture of coverups and political intimidation in this administration. it seems like the truth is hidden from the american people just long enough to make it through an election. i totally, totally disagree. if this hearing becomes essentially a bootstrap to continue the campaign of 2012, and to prepare for 2014, we will
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be making a very, very serious mistake. and, indeed, not meeting our obligation of trust to the american people. you're here today, mr. miller, you're here today, the inspector general, to talk about what happened, how it happened, where it happened, who knew what when. and if instead this hearing essentially becomes an effort to score political points, it will be a disregard of the duties of this committee. so i conclude with the sentence, we must seek the truth, not political gain. we look forward to full and forthcoming answers to our questions today. >> thank you.
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before the witnesses are recognized for the opening statement i will first swear them in. while this is the prerogative of every committe committee chair,s not been the custom here at ways and means, but it is not customary for this committee to of been so repeatedly misled by an agency under its purview. so opposite against the law to provide false things to congress the act is when in a witness impresses upon him or the gravity of proceedings and the need to tell the full and complete truth. please raise your right hands. [witnesses were sworn in] >> i do. spent let the record reflect the witnesses answered in the affirmative. thank you. i would like to welcome j. russell george west bend the treasury inspector general for tax administration. i think we wait for the camera to leave at this point.
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thank you. i would like to welcome j. russell george has been the treasury inspector general for tax administration since 2002, and mr. steven miller who escorted the acting commissioner for the irs. thank you both for being with us today. you will each have minutes to presentyour testimony, with your full written test 27 for the record. mr. george, we will begin with you. you're recognized for five minutes. >> chairman camp, ranking member levin, members of the committee thank you very much for the opportunity to discuss our report concerning oversight by the internal revenue service of groups that apply for tax-exempt status. as you are aware the organization that i laid, the treasury inspector general for tax administration, protects the integrity of the federal tax system. our audit was initiated based on concerns expressed by members of congress because of taxpayer allegation that they were subject to unfair treatment by the irs. our report issued earlier this
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week addresses three allegations. first, the irs targeted specific groups applying for a tax them status. second, that they delayed the processing of these groups application, and third, the irs requested unnecessary information from groups tospecial scrutiny. ree legations wered. the irs feels inappropriate criteria to target forward view tea party and other organizations based on the name and policy positions. this practice started in 2010, and continue to evolve until june of 2011. as the monitor shows, the irs was following inappropriate criteria. let me read to you these criteria from a briefing held by the irs exempt organization function in june of 2011. the criteria included the words tea party, patriot, another listed cartoon was the groups
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issued included government spending, government debt, or taxes. yet another listing criteria appear as education of the public by advocacy or lobbing to quote make america a better place to live, unquote. finally the criterion consisted of any statements in the case of criticizing how the country is being run. the reasons for this criteria were inappropriate, is that they did not focus on tax exempt laws and treasury regulation. for example, 501(c)(3) organizations may not engage in political campaign intervention. 501(c)(4) organizations can but it must not be their primary activity. political campaign intervention is action taken on behalf of all against a particular candidate running for office. although these criteria appear in the irs's own documentation as of june 2011, irs employees
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actually begin selecting tea party and other organizations for review in early 2010. from may 2010 through may of 2012, a team of irs specialist in cincinnati, ohio, referred to as the determinations unit selected 298 cases for additional scrutiny. according to our finest, the firsthefirst time that excited e washington, d.c. became aware of the use of these criteria was june 2011, with some exec is not become aware of the criteria until april or may of 2012. the irs is inappropriate criteria remained in effect for approximate 18 months. after learning of the inappropriate criteria, the director of exempt organizations change the criteria in july of 2011 to remove references to organizations names and policy positions. however, cincinatti step change the criteria back to target organizations with specific policy position, but this time
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they did not include tea party or other named organizations. finally, in may of 2012 after learning that the criteria have begin been changed, the organization's director rulings and agreements change the criteria to be consistent with laws and regulations. the organizations selected for review for significant political campaign intervention, again to under 98 in all, experienced substantial delays in the processing of their applications. the or positions expressing these delays included tea party organizations, patriot organizations, 9/12 organizations, among other organizations. as shown on the monitor, the status of december 2012 for 296 cases that we reviewed was 108 cases have been approved, 28 cases were withdrawn, and 160 cases were still open.
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zero cases have been denied. of the cases still open, some had been in progress for over three years and crossed two election cycles without resolution. of the 108 cases approved, 31 were tea party, 912, or patriot organizations. my final point is that the irs requested unnecessary information for many political cases. in fact, 98 of 170 cases that received follow-up requests for information from the irs had unnecessary questions. all evidence indicates that staff at the determinations unit in cincinnati sent these letters out with little or no supervisory review. the irs later determined these questions were unneeded but not until after media accounts and questions by members of congress are rose in march of 2012. examples of the unnecessary information requested included the names of past and future
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donors, listings of all issues important to the organization,, with the organizations positions work regarding such issues, and with officers or directors have run for public office or would be running for public office in the future. months after receiving these questions, 12 of the 98 organizations either received a letter or a telephone call from the irs stating that the applications were approved and they no longer needed to respond to the additional requests. the irs and form another 15 organizations that they did not need to respond to previous request for information, and instead they would send a revised request for information. regarding the donor information received from applicants, the irs informed us that they destroyed that information. in closing, our audit found clear evidence that each of the three allegations were correct. was the irs using inappropriate criteria in its review of organizations apply for tax-exempt status? yes. was the irs dealing their
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applications? yes. and, finally, did the irs ask qutions of applicantsecessary ?-que?-que x again, yes. these findings h avratroubling questions of whetr the irs has effective management oversight and control, at least in the exempt organizations function so that the public can be reassured that the irs impartial in administering the nation's tax laws fairly. chairman camp, ranking member levin, members of the committee, thanks for the opportunity to present my views, and i look forward to your questions. >> thank you mr. george. mr. miller, you are now recognized for five minutes. >> thank you, mr. chairman. thanks for the opportunity to be here today. unfortunately given time considerations we received the notice of hearing within the last two days, the irs was unable to prepare written testimony. i would note that i've a very
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brief statement before take your questions. first and foremost, as acting commissioner i want to apologize on behalf of the internal revenue service for the mistakes that we made and the poor service we provided. effective organizations at the american public deserve better. partisanship or even the perception of partisanship has no place at the irs. they cannot even appear to be a consideration in determining the tax exemption of an organization. i do not believe that partisanship motivated people who engaged in the practices described in the treasury inspector general's report. i have reviewed the treasury inspector general's report and i believe its conclusions are consistent with the. i think that what happened here was that foolish mistakes were made by people trying to be more efficient in their work load selection. the listing described in the report, while intolerable, was a mistake and not an act of partisanship. the agency is moving forward. it has learned its lesson. we previously worked to correct
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issues in the processing of the cases described in the report and we've implemented change to make sure that this type of thing never happens again. now that tigta ha has completeds back on and issued its report, management take appropriate action with respect to those responsible. i would be happy to answer your questions. >> all right. thank you mr. miller. are you still acting director of the irs? >> i am. >> and we appointed by the president of the united states? >> no, sir. >> when was that? >> i was designated as acting in november. november of 2012. >> 2012. if i'm not mistaken you hold actually too tall, acting director of the irs and also deputy commissioner for service and enforcement? >> i do, sir. >> in your role as deputy commissioner for services and enforcement, according to the irs website, in that capacity you direct and oversee all major
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decisions with regard to the tax exempt and government entities division? >> that is a division that reports through, to me the tax-exempt government entities office from this. >> so the website is accurate and? >> yes spent could be reported in that position, actually in both of your positions? >> in the deputy commissioner role i would report to the commissioner, if there was one. without a commissioner, holding both hats i would report to the deputy secretary. >> of? >> treasury. >> treasure. and is it not a violation of irc 6103 to disclose confidential taxpayer information? >> it is. >> and that really applies to all taxpayer information? >> not quite sure what that means to be honest spent in practice basically all tax, not just the return -- >> 6103 obligates us not to disclose taxpayer information. were you ever made a where in
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august of 20 and a white house official in a conference call with reporters disclose the confidential tax structure of a private company? >> i probably read in the paper, sir. >> you weren't made through news reports because i think that is probably a. it was a long time ago. >> did you take any steps when he learned of that? >> i don't recall. i don't, i don't recall. i will have to go back down and search. >> so you didn't informed inspector general of that or your superiors that you recollect? >> i'm not sure why i would have to notify the superiors. it was in the papers. i don't remember whether we made a referral or i'm a referral at that time. >> according to the inspector general audit, the targeting of conservative groups began in march of 2010. when were you made aware of? >> i was aware of that on may 3
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of 2012. >> and how were you made aware of? >> i was made aware of, not the targeting, but i was made aware of the process that was described in the tigta report when i asked some of our people to go and look at the cases, subsequent to the public discussion of over broad letters coming up. up. >> so that we been in your role as acting director as well as the deputy commissioner for services and -- >> no, i was debbie at that time. >> when you say you asked some of our people, who would that have been? >> i asked the senior technical advisor for tax exempt government entities to lead a team and take a look and see what was going on in terms of cases that had gotten of those letters. >> did you inform anyone of that action that you took, of those steps?
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>> so, i do that. i mean, i asked, i as the senior technical adviser to do that in late march, march 23 or 26, something like that. and she and her team came back to talk to me in may, and subsequent to that, i'm sure i informed the commissioner. the commission was aware of the letter as well. >> did you inform anyone other than the commission at that time speak with you mean up the chain? >> yes spent i don't believe so. >> or the inspector general. >> the inspector general was aware of it, had made clear to us they were unaware and were in looking at it at that time. >> okay. was there a time when he became aware of the irs launching audits against conservative donors? that would've been and about may of 2010. >> yes. that, i don't remember the date, sir, but yeah, in that ssmeframe.
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accounts and congressional's coming and talking about that. >> did you learn that from the press or did you learn that from inquiries from congres co d have been either. it came up in a meeting, and then it hit the press, and so i don't know. >> in any event after learning of that information of the audit, did you, what steps did you take? >> we investigated what happened. we took a look, and ultimately i issued a directive that said that the law in the area was not that clear, and that we had not been enforcing in that area substantially since the period of, i believe 1982 or something like that, revenue rulings that talked about gift tax and see for organizations. and i said let's not enforced right now. let's talk about. let's study it and we will put
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out guidance and the guidance will be prospective or i thought that was a fair thing to do, mr. camp. >> when you say we investigated, who would not have been? >> i'm not, i don't remember but we took a look at the issue. will look at how it happened but i think you're looking at it as well, your committee. >> when you say we, what does that mean? >> the irs looked at the issue. >> what department? >> would have been counseled. i don't know that it was an exempt -- i start, i'm not going to build answer with reticular be there. >> would ever made aware of the publication of the coverage of 2008 donor list of the national or positioned for marriage? >> i was. >> when was that? >> i will have to get back to you on that. >> how did you find out the? >> don't remember. might have been prez, might've been somebody coming to us with the congressional complaint. >> when you learned of that obligation, did you take any
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steps? >> believe we made a referral to tigta at the time. >> and you're not sure when the river was made? >> it would've been within the same timeframe. >> shortly after you became aware of its? >> would have been. >> were you ever made aware of the irs leak of confidential applications for the tax-exempt status of conservative groups do propublica? >> i was. >> again when were you made aware of that? >> again i'm not going to be up to give you a perfect online, not a proximally the time to begin public is when i became aware so you would know that from the timeline. >> did you inform anyone else of that? >> i believe the service inform the tigta at that time, yes spent in each of these incidents i've asked you about, did you ever comport and inform the congress? >> i don't believe so, unless it came up in conversation or
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testimony. can i suggest something, mr. camp, on those two, just to let you know. >> this would be the national or position on marriage and propublica? >> those two situations, we went to tigta and i think mr. george and speak to what they find, what they found, we made a referral and i believe, i believe what they found was that those disclosures were inadvertent and that there's been disciplined in one of those cases for somebody not following procedures. but i will always elect mr. don't george speak of that. spent but you never inform the congress of any of these things that you are aware of? >> they were in the press, sir. >> all right. well, obviously, the irs mission statement says that the role of the irs itself america's tax to understand and meet the taxes
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possibility. and enforce the law with integrity and in fairness to all. and i think clearly your mission is not being met. mr. george, i guess i just have one last question, mr. miller but when asked the truth, and you know the truth and get a legal responsibility to inform others of the truth, but you don't share that truth, what is that called? >> i always answer questions truthfully, mr. camp. >> all right. mr. george, were you ever made aware of the alleged disclosure of the confidential tax structure of a private company? >> we have been alerted thank you personally were a made aware of it speaks up to, one in specific or in general? >> you specifically. >> to a specific company or in general? >> it was a specific company but there was disclosure of taxpayer
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information, the confidential tax structure as you know, information is considered confidential, particularly the tax structure of a private cover. were you made aware of the public disclosure? >> we are made aware of public disclosure of information that is protected by title 26, section 6103, yes. >> are you aware of the incident i'm referring to? >> i am aware of that, yes. >> when we made aware of that? >> i don't have the exact date, sir. >> how were you made aware that? >> i believe they came through my office of investigations, or it could've been put through a hotline. that i'm not completely certain of. >> so you don't believe you learned of it from another come from an irs employee? >> i generally do not, below the commission or level commission interact with average irs employee. it goes through a chain of command. >> that would include the
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commissioner. so no irs employee informed you of this information? >> most likely it would have, from one of my principal deputies, and they may receive that information from someone. i don't believe at the commission level but it may have been acting deputy commissioner level. >> but you are not aware, you can't tell us for short? >> at this time i cannot, sir spent we've ever made aware of the alleged publication of the confidential 2008 donor list of the national or position for marriage of? >> i both read in the newspapers allegations to that effect but i have to make it clear, mr. chairman, that the intel revenue code has very strict rules as it relates to the way that confidential taxpayer information is revealed, and we at tigta are the ones who enforce those will excite to be very careful as to exactly how i respond and whether or not i can even acknowledge publicly some
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of these revelations that you're inquiring about. >> did you respond to that information? >> a review has been taken. >> is it ongoing? >> i will have to confer with my colleagues, if you'll give me a moment. >> all right. >> it is not ongoing. >> all right. there are daily reports of new allegations of irs misconduct, political targeting, and it's clear that more work needs to be done. is your office continue to investigate these allegations? >> yes, we are, sir. >> thank you. mr. levin is recognized. >> thank you very much. i wanted to going to other things, but the incidence that mr. camp has been talking about, disclosure, what years were those? mr. milner? >> again, sir, i apologize for
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not having the date in hand. they have been a couple years now i believe. >> couple years. who was the commissioner at that time? >> i believe it was mr. shulman. >> who appointed mr. shulman? >> mr. bush. >> let me start with two key issues. there's no question about the inappropriate criteria. i want to focus on that, but let me first ask right up front if i might, mr. russell, during the course of your audit were you allowed access to everyone you requested to interview? >> to my knowledge we were not denied access to anyone. >> did you interview employees in both cincinnati and in d.c.?
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ye we did, sir. >> on page seven, mr. george, of the ig report it states and i quote, all of these individuals stated that the criteria were not influenced by any individual or organization outside the irs, is that correct? >> that is the information we received, correct. >> did you find any evidence of political motivation in the selection of the tax exemption applications? >> we did not, sir. >> mr. miller, during your view of this matter, you indicated when you started it, did you find any evidence of political motivation on the part of employees involved in processing the applications at asia's? >> we did not, sir. >> if we do put on the screen the organizational chart, is that possible? from the report.
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someone going to do that? it's called high level of organizational report. mr. miller, in 2010, the inappropriate criteria that singled out applications for tax exempt status binding was developed by what office? >> it would be developed by an office that actually is not on your blood is on page two of this is under lowest learners jurisdiction. >> and where are those employees located? >> for the most part they are located in cincinnati. there's about 140 folks who do this sort of work in cincinnati. there are a handful of people around the country that report into cincinnati as well. >> in 2011, the report finds that the drug of exempt organizations, yo on the sir, and i'm afraid it's not on the
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screen yet, this is ms. learners decision, became aware of the inappropriate criteria. she ordered the criteria change and it was changed in 2011 to no longer referred by name tea party or patriot. mr. george, is that correct? >> that is correct, sir. >> mr. miller, as then deputy were you aware of the problem with the criteria in june and july of 2011? >> i was not, sir. spent back in january 2012, the criteria was changed again to come adecco, organizations involved in limiting expanding government, educating on the constitution and the bill of rights, and social economic reform movement. the ig's report indicates that this change was again made into cincinnati determination's
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office without executive approval. mr. george, is that correct? >> that is correct, sir. spent it was changed without executive approval? >> that is our ndering. he may 2012 criteria in place today, it states, organizations within indicators of the neck and amount of political campaign intervention, the ig report states that in quotes it more clearly focuses on the activities permitted under the treasury regulations. mr. george, is that correct? >> that is correct, sir. >> my time is up. >> all right, at this time i will yield to the chairman of the oversight subcommittee, doctor visconti. >> turn one. mr. miller, on march 22 of 2012, the oversight subcommittee held a hearing in this room, and i specifically asked then commissioner shulman about
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reports that the irs had been targeting tea party groups and other conservative groups. i would like to play the video of his response. could we have the video? there's absolutely no targeting. this is the kind of back and forth that happens when people applied for 501(c)(4)s. >> this was in march, march 22 of 2012. knowing what you know now, was commissioner shulman's response truthful? >> it was incorrect, but whether it was untruth or not, look, when you talk about targeting, and we should really get into this, dr. boustany, because when you talk about targeting, it's a pejorative term. what happened here was, and i'm not defending the list, but what happened here, and i would like to go see the application process, what happened here is
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that someone saw, some tea party cases come through. they were acknowledging that they're going to be engaged in politics. this was the time frame in 2010 when citizens united was out. there was a lot of discussion in assistant about the use of (c)(4)'s. people insensitive decided let's start grouping these cases. let's centralize these cases. the way they centralized it, troublesome, the concept of centralization not. and we not targeting these people in that sense. what we are doing is making sure that we bring them in and have people speak let me ask you this. you said incorrect but not untruthful. does that mean he was not informed? was not informed of this process? >> to my knowledge i don't believe he knew at the time. >> because in march you said technical advisor to cincinnati, there were press reports, there were letters from chairman camp and myself dating back to 2011. and so clearly there was
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congressional interest in this issue, press reports, and you were saying he was not informed of this? >> so let's divide the room into a couple of pieces. there is the list that was used, and there was a processing of the cases. at the time we were aware that there were issues in the processing of the cases. we are not aware of the list. i asked in late march, action after the thing i believe, for us to go in and take a look because i thought there were problems in processing of the cases. they came back with both pieces. yes, there were problems with the cases and was problems with the listing. >> so you were given a complete briefing on this in proper selection, based on political beliefs, and this briefing was i think you said may 3 of 2012, is that correct? >> so, i would recharacterize your question, sir. i was informed of what we have found out to date. tigta was in there at the time.
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i was told that there was a use of the list, the list seemed obnoxious to us, as it does to you, and we're going to take actions on that. that was in a. >> and you say it was not targeting, but why was only one side of the political spectrum singled out in this? >> so, i think what happened was they were, look, they get 70,000 applications in there for 150 or 200 people to do. they triaged those. people look at them and they send them either through the system because they are okay, into a mix of folks so that they can get technically fixed a. and some go for substantive questions. politics is an area where we always ask more questions. it is our obligation under law to do so. as mr. george indicated. [talking over each other] a trannineteen to some of it.
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our office because mr. miller, we received letters describing the process but we're trying to get to the heart of this matter and after the briefing and made a total brutal tax-exempt applications were being targeted if they contain terms such as tea party, we the people, patriots, and so forth that many of the terms that chairman camp referenced. and knowing these practices, knowing that you sent letters to congress acknowledging our investigation of these allegations but consistently omitted that such discriminatory practices that are alleged were actually in fact taking place. why, why did you mislead congress and the american people on this? >> mr. chairman, i did not mislead congress nor the american people. i answered the questions as they were asked. spent why didn't you tell us about the terms? >> time has expired. mr. crowley is recognized. >> thank you, mr. chairman. mr. george, you are the
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inspector general of the treasury, is that correct? >> that's really, there are three inspectors there are three inspectors general there are three inspectors general within the department i'm the inspector general exclusively focused on the irs. >> over the irs, very good beer and your appointed by then-president bush, is that correct? >> correct. >> and just in your report that no one outside the irs was involved in this political targeting of not-for-profit organizations, is that correct? >> that is the funny of this particular audit. >> your audit, your funnycar that no outside groups were involved, correct? >> of this particular, yes, as of now. >> mr. george, who was the last presidential the appointed irs commissioner? >> it was douglas shulman. >> douglas shulman, correct? >> correct. >> appointed by then president george w. bush, is that correct? >> that is correct, sir. >> mr. shulman was commissioner wendy's improper and outrageous
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-- both sides of go recognizes being outrageous and improper when they occurred, is that correct? >> yes, it is. >> mr. george, prior to commissioner shulman, the last of the head or political appointee of the irs was mr. mark everson, is that correct? >> that is correct, sir spencer was also appointed by president george w. bush? >> yes, i believe so. >> during his tenure, while groups like the naacp, progressive churches that were in opposition to the war in iraq, and environmental groups were targeted, of the irs, mr. miller, while you were appointed acting commission at the irs, you are not a career, you are, sorry, you are a cover civil servant, is that not the case the? >> it is, sir. >> and you were not a political appointing? >> i am not a political
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appointee. appointee. >> what i am trying to point out and basically evolved is the notion or idea of the political statements, about with non-factual statements i chairman camp, to link these scandals to the white house, or solely the targeting of conservative groups. i was the person last week to asked the question of ms. lerner as to whether or not the irs were investigating political not-for-profit organizations. and that that hearing, we were not given a proper, we were not given an answer i think mr. visconti would agree, rather the world only learned after she was asked a question at, a president come at that sadly unacceptable. but what i also think it's important to keep is least
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hope in a nonpartisan, made a bipartisan content. because we want to find affected want to find out who knew what when, and why steps were or were not taken. i was as outraged when i learned that when she was asked the question why she did that to congress when she was before congress. our responsibility was no one ever asked or. i asked her and she didn't answer the question. so we're all outraged. were all upset about this but i don't believe nor do in my college believe that any organization, political organization should be targeted solely because of their thought. that's on both sides of the spectrum. and i would dare say doing the prior administration and mr. shulman and mr. everson, that there was targeting of political entities as well. it has to end. that has to end on both sides and the president has been very
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forthright and very strongly condemning that type of action. the entire administration is the as has mr. lew. so i would really ask chairman and my colleagues on the other side, let's get the answers. asked the question can't get the facts, and then we can draw our own conclusions. without i yield back about us of what i'm. >> thank you. mr. byrd is recognized. >> chairman, thank you for getting to the truth in this scandal. let's look at one of tea party groups in my community. the founder of a small businesswoman file protected him steps in july of 2010. fully 20 months later in figure 20 so she received a letter from the irs with numerous follow-up question, a lot of them, ma but she answered every one of them and returned wealth in the two week time limit. now almost three years to the day that she first filed, for
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application -- or application is still pending. but let's look at what happened to her in the three years since she applied. beginning in december 2010 she was visited by the fbi domestic terrorism unit. or partial returns and/or business returns were both audited by the irs. she received for fbi inquiries. and her business received unsolicited audits, unscheduled audits by osha, the commission on environmental quality and the atf twice. now, this is a citizen in a small businesswoman who had never been audited by the irs or any of these agencies, until she applied to you for tax-exempt status for her tea party. there's a broader question here, is this to america? is this government so drunk on
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power that it would turn its full force, it's full might to harass and intimidate and threaten an average american who only wants her voice and their voices heard? mr. miller, who in the irs is responsible for targeting conservative organizations? >> so, let me first say, i cannot speak to a given case. we have talked about 6103 but that -- >> this is not just one case. you know what we're talking about the whole list the inspector general put up the. who is responsible for targeting these groups? >> so again i'm going to take, i'm going to take exception to the concept of targeting because it's a loaded term. the listing was done -- >> this is not a listing. you created a be on the look out list. that's not a centralized government mandated or directed listing. you had a be on the look out list that you acknowledged, to
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the cases inspector general already verified. so the question remains, who is responsible for targeting the conservative organizations? >> so again, and i think if you look at the tigta report it answers your question. >> there are no names in the inspector general's report. so i'm asking you, not only as the acting commissioner bud as the deputy commissioner over this organization who is responsible for targeting these individuals. >> so i don't have names for you, mr. brigham and am willing to try to find that out. i think tigta is looking at that right now. i do think targeting again is -- >> your tongue as you have no knowledge of who initiated or who approved this targeting of conservative organizations? >> i will stand by what the tigta has put out there as the facts. >> can you assure this committee that none of the information provided the irs by this group
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was shared or given to any other federal agency? >> that would be a violation of law, and i do not believe that happens. >> you can insurance there there was absolutely no sharing of this information with another government agency? >> tigta and others will look at that but i will be shocked, congress and, if that happened. shocked. >> if your earlier answers or any indication we will all read about in the media, we ought to be getting the truth from you. mr. chairman, i yield back. >> thank you. mr. rangel is recognized. >> thank you, mr. chairman. [inaudible] >> we are all outraged what occurred under the bush appointees as well as the obama appointees. >> there were no obama appointees, so under mr. shulman -- i'm not sure, i apologize, mr. rangel. i'm not sure, are we talking about -- >> people, the once it was discovered that people were put under a list, a look out list,
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that type of thing, regardless of what you call it, worry the people responsible in treasury department appointed by president bush as well as continued service under president obama? basically what mr. crowley was talking about. >> at the irs the commission was appointed under the bush administration. obviously, at treasury those would be, at main treasury, those individuals would be obama appointees. >> what i'm trying to say, this outrage is not democrat and republican. it involves the credibility of government as relates to american citizens. now, the president has indicated outrage. you have indicated outrage. so i would assume that we are on the same side in trying to
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determine how did this happen, who was responsible for it, how far does this cancer to? how quickly can we cut it out? so that tens of thousands of irs employees have this stigma of corruption taking away from them, that you, mr. miller, who is a career employee don't have to explain to your kids and friends that you are not involved in this scandal, that all of the people that served the government, it's too late for the congress, but it's not too late for the government to try to get its reputation cleaned up for america. so i don't want to see anger with you do, but i certainly hope before this hearing is over that you share with us how you intend to have your voices heard so that america would know that
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whether this was criminal activity or a mistake, i don't know, but we have to get on with it. now, under 501(c)(4), we are supposed to allow political activities to take place, meaning that you can make political donations without saying how much and who made the donations, right? >> i -- if i could restructure. under 501(c)(4), organization organizations, donors and their contributions are not public information, if that was the question. >> so you can make political contributions. >> you can make contributions to 501(c)(4) that are used for political purposes. >> yes, and you can do this as long as this is not the primary purpose, you can do this or denying%, up whatever the activities are, without technically violating the law. is that not correct? >> that test is whether your primary activities are social welfare in nature.
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>> primary means that technically you could to 49% political. >> we've never been that precise. >> i know what i'm asking, you could say that. >> yes. >> and after the supreme court's decision in citizens union -- what? united, whatever. [laughter] the applications for this type of cooperation increased dramatically, did it not? >> they did double, yes or. ..
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>> it is something that we have to look at closely, yes sir. >> you should have wanted to look at this earlier before this what my friends call a scandal. this is wrong to abuse the tax system. this screams out of tax reform does it not? >> i think it's an area ripe for redefinition and reform, yes sir. >> a regardless of republicans or democrats admit something like this, the outrage should still be there. is that not correct? >> the outrage as to? >> the abuse. this section of the law has been abused by government employees, not by all of them but by some of them and our job is to find out who they are and all i want to get from you mr. miller and you mr. george is that your integrity is on the line. the president, the administration, the irs
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employees that work hard each and every day and unfortunately the congress is involved in this. people are losing confidence in how government, and i hope that you feel the same sense to find out how this is going to happen and help us to restore the confidence that americans should have in their government. i yield the balance of my time. >> mr. ryan is recognized for five minutes. >> thank you. mr. miller we have now established and you have acknowledged that you were briefed on may 1 that there was improper credibility use for tax-exempt applications. tax-exempt applications were maintained by the tea party people patriot will of writes constitution and those that criticized how the country was run. after that, you sent letters to congress acknowledging our
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investigation of these allegations but omitted that the discriminate practice source were alleged in fact in place. then and remember this took place in may of 2012, then you came here to a subcommittee hearing on this issue on july july 25. where we were investigating the discriminate. filters used on the 501(c)4 applications. specifically, you were told that certain groups felt that they were being harassed and you're asked this question. quote, what kind of letter or action is taking place at this time that you are aware of? knowing full well that these filters were being used to target certain groups you said and i quote, i'm aware that some 200 501(c)4 applications fell into this category of the determination letter process. we did prove -- ring these organizations together to ensure consistency and quality and we continue to work with those cases" matt. that was your answer to this
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committee. after you had received the briefing that these targeting was occurring which earlier you told us was outrageous. the law governing how you must respond to congressional inquiries requires you to tell not only the truth but to tell the whole truth. your quote cannot conceal or cover up any tricks scheme or device a material fact. how was that not misleading the committee? you knew that the targeting was taking place. you knew the terms tea party patriots were being used. you acknowledge a minute ago that they were outrageous and then when you're asked about this after you were asked about this that was the answer you gave us? how can we not conclude that you misled this committee? >> that was a lot of questions. >> it is one, how can we conclude that you did not mislead the committee? >> i did not mislead the committee. i stand by my answer then and i stand by them my answer now.
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harassment applies to political motivation. there is a discussion going on and there is no political motivation. >> let me ask it again. >> may i ask the dash answer the question? >> let me give you some clarity. what kind of action is being taken place of inaction you are aware of so that the discussion of the context of that and again we need to go back and look at the context, there was the listing, the treatment of the cases. my understanding of the question is the treatment of the cases because all of the letters and these include mr. marchant talking about i'm hearing that people are complaining about the letters. my response was to that, we found out about those letters. we dealt with them as had been explained. we gave more time. we went and talked to them about
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expanding the way they could answer it and we dealt i think fairly and successfully with the issue. >> you knew of our concern of the target and you knew the allegations that were reported to the committee. we brought you here to talk about it. he received a briefing that this targeting was taking place but you did not do both sets of that to the committee. you said you're in answer you are aware of 501(c)4 categoriecategorie s fell into this category. we did these groupings to ensure consistency and quality to work on those cases. he didn't mention talking based on ideology. you didn't mention targeting based on words like tea partier patriot. you knew that but you did not mention it to the committee. do you not think that's an incomplete answer to? >> i answer the question truthfully. >> let me ask you one more question. you just gave us a list the other day of approved applications for 501(c)4 applications.
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we don't know how long these applications that or how long it took to process them. just from mr. rangel's questioning in earlier testimony the irs was doing this because they were concerned about political activities by non-profits and that is what seems to be taking place here. some of these that were approved chattanooga organizer action progressive leadership alliance and the progressive usa. if you are concerned about political activity, did you have targeting this that contained words like progressive or organizing in their names? >> so let me ,-com,-com ma let's step back again and walk you through the process. we centralized pages based on political activity, evidenced in the file. we took a shortcut on some of it but we collected to be blunt more than indicated. mr. george's long report --
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>> organizing words that were used for targeting, is that correct? >> if any time it was seen that political activity was part of the file that went into -- >> my time has expired. mr. mcdermott is recognized. >> thank you mr. chairman. usually this congress can't agree on whether the sun is shining but this issue is brought us together in a way unlike we have seen here. we all agreed that the applications were poorly handled and the irs -- public service ought to be held to a higher standard and none more so than the agency that oversees and enforces tax collection. the irs is an easy target and everybody wants to get a pitchfork when the tax man comes but with our 24-hour media cycle, it's getting harder and harder to get the facts and fix what really is going on here. there is a difference in my mind
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between stupid mistakes and malicious mistakes. the overwhelming majority of applications for tax-free status for political activities were from far right groups and examiners took a shortcut which they clearly regret, deeply regret. the report says in black and white on page seven quote, the determination unit employee stated they consider the tea party criteria as a shorthand term for all potential clinical pieces" matt. these applications were singled out for their names and policy positions and not for the act to these which is really what they should have been singled out for. some of these political groups gain taxpayer status and that was wrong. i think it's wrong to be uneven handed in government applications.
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the inspector general report says that no one acted out of malice or political motivation. mr. george i want to know do you still stand by that? >> we have no evidence at this time to contradict -- contradict that assertion. >> if we want to root out the problem with this we need to root out citizens united which is when this started. it all started right after citizens united. people saw the door open could get in and could do political advertising and we don't have to report anybody's name. applications for secret money and political organizations increased by fourfold. after that supreme court. the small group of people in the cincinnati office screwed up. nobody is going to deny that. they simply screwed up. but the congress, this committee messed up by not getting any clear criteria for what a real
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charitable organization is. the law is not clear and people have to make judgments and that means they have got to collect a lot of data to try and figure out what people are actually up to. mr. miller clearly there is a problem determining what an organization's primary purpose is and i want to ask you in a minute about that. i want you to think about it while i'm talking but as i watched this congress asian shift to finding out what is right and wrong to fixing it to the irs's broken list, imagine if we could have repealed that along with obamacare yesterday. i'm reminded it's only part right and part wrong. it's also about republican storylines in this agenda. we need to find some truth here and i have heard members of this committee now talk about it. the irs can't access your medical files. is that true mr. miller? >> that is correct, sir.
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>> they cannot find that your private medical information. >> that is correct, sir. >> the job in obamacare is to simply collect financial information on which a determination is made as to whether somebody can get a subsidy for their premiums. is that correct? >> water recovering and over what period. >> it is not a fascist takeover that is going on here but the health care system. and let's not forget that the irs has one of the hardest and most hated jobs and there are thousands and thousands of good solid hard-working americans who work every day to run this system. a couple of people make a problem, that does not damage the organization in my view. to get rid of the people who made the problem, but i would really like to hear from mr. miller. what do you need that with so
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that this wouldn't have happened? >> so there are two things, sir. and i appreciate your kind words because we are incredibly hard workers in an honest group and that seems to be forgotten in all of this. with respect to political activity, it would need a wonderful link to get better rules, to get more clear rules and in terms of our ability to get this work it would be good to have a budget that would allow us to be more than the number of people we have to do 70,000 applications and do our job and looking at whether an organization has enough or not. >> my time has expired. mr. nunes is recognized. >> do you know the rector of the irs's exempt organizations lowest earner? >> i do, sir. sir. >> are you aware that you testified before this committee
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last wednesday on may 8? >> i believe i was. >> ru is aware that she did not acknowledge this investigation at the time? >> actually do not know that i was engaged in other testimony that day. >> were you aware that the irs was preparing a statement to put out during this time last week flex. >> yeah. i don't know whether we knew at that time or not. >> wouldn't miss lerner have known that at the time last week when she testified before this committee? >> i don't know that. >> did you know that miss lerner was going to appear last friday may 10 on a panel called news from the irs and treasury at the american bar association conference? >> i knew she was appearing. i did not know the topic. >> did you or any of your subordinates direct lowest lerner to make a public statement at the panel discussion acknowledging the targeting of tax-exempt groups? >> it was a prepared q&a. >> do you know ms. cecilia rhody a member of irs's advisory
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council and tax-exempt government amenities? >> i do. >> was her question to ms. lerner about targeting certain groups planned in advance? >> i believe we talked about that, yes. >> did you ever had any contact either by e-mail, phone or in person with the white house regarding the targeting of tax-exempt groups from 2010 until today? >> absolutely not. >> how about the department of treasury? >> i certainly would have had some conversations with treasury in my role as acting commissioner because i reported to them. on this topic it was, it would have been i believe very recent to that conversation. >> how about president obama's re-election campaign? >> no. >> did you ever have any contact with anyone associated with organizing for america or its
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nonprofit successor organizing for action and? >> no. >> did you ever had any contact with anyone associated with propublica? >> i don't believe so but there was when this whole thing came out, that was previously referenced i think the irs might have talked to them, yes. >> something that would probably clarify your involvement in this mr. miller would be if you submitted to this committee your e-mails, phone records and personal schedule from 2010 until you resigned. would you be willing to do that? >> i will have to see what is appropriate. >> you know we could subpoena those records. >> i understand that i will have to talk to my lawyers and the agency. i am just saying i don't know. you are asking me and we'll talk. >> mr. chairman i would suggest that we work hard to get those records and i would also encourage you to contact ms. rhody and miss lerner to
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testify before this committee at their earliest possible time. i just have one last question mr. miller. you really are not taking any acknowledgment that you knew anything and you didn't do anything wrong and he said that numerous times on the record today. that you did nothing wrong. so i find it hard to believe, why did you resigned or why are you for signing? >> i never said i didn't do anything wrong mr. nunes. what i said is i resigned because as the acting commissioner what happens in the irs whether i was personally involved or not it's -- so i should be held accountable. whether i was personally involved or not is a very different question, sir. >> i know you be willing to
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submit all of your e-mails, phone records and any personal meetings that you had in the last four years and i think that would really keep your reputation in good standing with his committee and the american people. >> obviously we will have to talk about that. i'm not saying no. i just don't know. >> thank you mr. miller. i yield back my time. >> esther knew is recognized. >> earlier you referenced an article from "usa today" and i would like for the purpose of this hearing to insert an article from "bloomberg news" that appeared on may 14 indicating that there were democratic organizations that were the focus of the irs as well. >> without objection. >> thank you. mr. chairman when i woke up this morning as i they do just about every morning now, i looked at my phone and i was curious about what the word of the day would be and the word of the day
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miriam webster is located in my hometown and you rejected the term targeted. is that correct? >> i think it's a term that implies something that did not exist here. >> let me draw you to merriam-webster by sheer irony suggested and that is they use the term litmus test which they define as a single factor as an attitude event or a fact that is decisive in choosing these organizations. would you say that there was a litmus test? >> no, sir. the litmus test of any was the political activity. >> okay. i have one one of my constituens who contacted my office yesterday outlining a pretty egregious situation. he is the treasure of a small nonprofit in massachusetts, a volunteer organization i should note and their association was told by the irs that they were not required to file a form 990 because of their small size so they did not buy one.
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this past november they received a letter from the ire saying their tax-exempt status have been revoked for failure to file the necessary forms without any advance notice. the irs told them they no longer need to file the form but instead of notifying them first about the problem and allowing them to fix fix it, especiallye advice they were given by the irs the irs went ahead and revoked their irs status. they now have to reapply and pay. the nonprofit has been around for 60 years. taxpayers should not be intimidated by the irs and there is broad agreement on that today. the american people should not be afraid of the irs and there is wide agreement on that today but we should be able to rely on the advice of a provider not be punished for it. i hope we are going to have an opportunity to work on this specific issue but i want to talk to a topic of recent focus by the irs and that is obviously the question today and the
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allegation that the political views have caused them to be combat focused. we all know that is outrageous and unacceptable and a thorough review will get us to the bottom of this to be sure that it never happens again but let's not forget something this morning. even with the actions of knowledge by the irs there is still an underlying problem here and that is 501(c)4 being engaged in politics. after citizens united irs was flooded with applications as you have indicated. seeking 501(c)4 status and why was that? in large part because 501(c) fours do not. as policymakers we have many disagreements on this committee between the parties however i think we should be able to agree on that call of disclosure. the torrent of money and public
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life with buckley versus valeo in 1976 which the court held that money enables speech. but, the caveat included in that opinion which while never fully acknowledged probably was written by justice brennan. quote the suggestion that sunlight is said to be the best of disinfectants, electric light the most efficient policeman. so it's part of our scrutiny i think that we all out to be able to agree based upon this problem here today that the simple act of transparency and disclosure would alleviate much of what has happened here. there wasn't this rush because they wanted to join the sisters of mercy in common clause for the purpose of engaging in politics. it was in many instances to hide the donors. i am hoping that we can get to
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the bottom of this in fuller context but i want to ask you specifically commissioner, is any one discipline directly related to this review approval and have any actions, corrective actions been put in place to ensure that this does not happen again? >> so let me walk-through. the answer to that is yes. what happened in may when i was told this, i asked the management there to reassign an individual who is involved with these letters that were objectionable. i also asked for counsel to be given to the person we thought of at the time was responsible for the list. i also was aware that -- was looking at this and as i mentioned in my statement now that they are out with the facts we will be able to look again. i should note just because, i
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have got to be very careful here, the oral counseling provided it turned out that person may not have been involved so what was done in lieu of that were all the managers in the group were brought in and walks through the new processes and explained that this was no way to behave as the irs and the last thing is served, is that in terms of the future the listing cannot be done and cannot be changed absent a high-level approval at the executive level. >> all right thank you. >> thank you mr. chairman. mr. miller in january of 2010 organization called liberty twp. tea party in ohio applied for tax-exempt status. there is no resolution of their application to this day. the tea party received 35 questions and i have them in front of me and march of 2011 with over 94 questions when you look at all the sub questions.
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the letter directs the applicant to provide under penalty of perjury some of the following information. copies all activities on facebook and twitter and resumes of all past and present employees. whether a past or present employee or their family members plans to run for office in the future. mr. chairman of like to submit a copy of the columbia dispatch article from yesterday that references this and in fact mr. chairman in the article i quote abe board member from liberty twp. tea party who is actually in the audience today. quote we are an educational group he said. we don't have a paid status. we don't endorse candidates. we don't do anything, those political activities. >> without objection the article will be placed in the record. >> question 26 of the irs questionnaire to the tea party group is as follows.
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provide details regarding your relationship with an american citizen who was in the audience today who still doesn't know why he was questioned number 26. the dispatch article goes on to say, many comments that he was shocked when he found out that iris was asking questions about him of a group that he barely knew. he had been involved in the cincinnati tea party and he served as a spokesman that he said he had not worked with the liberty township tea party or quote the obvious question that comes to mind are why am i being targeted amongst all the others? where does this information go in and? clearly doesn't get shared with other government agencies? do i get an audit and if i do is it against my business? all of those things go through your mind. now, to this day he does not know why his name is question
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number 26 for an organization who still hasn't received approval since january of 2010. the article goes on to say democratic governors ted strickland, former governor of ohio, his top aide who i know is very political file for tax-exempt status as a 501(c)(3) organization in august of 2011. they were approved nine months later. mr. miller, another organization ohio, the ohio liberty coalition. this is part of their document in response to irs requests. it's only part of it. all these documents weren't enough for the irs to approve their application and in fact the former president of the urbanization who is here today said that they applied in june of 2010. they finallyeceived approval.
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this wasn't enough by the way, in december of 2012. one month after the november election. there was another lady i met in the audience from ohio, fremont ohio who indicated that her group had a book club and the irs demanded a list of all the books they had read and a book report from the group explaining what was and the books that they read. you can't make this stuff up. this is unbelievable. mr. miller, i don't know how you can defend any of this and i don't know how you can say it's not political when the liberal group got an exempt status against the three that i just mentioned didn't for over two years. ms. lerner, who was her boss and 2011 and 2012? who did she report to? >> i believe it would have been --
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>> sierra ingram may be? >> part of that time and part of that time another gentleman. >> that other gentleman has since submitted his resignation? what is missing from doing today? what is your job title? >> she works on implementing the affordable care act. >> who promoted that -- her to that position? >> i would have promoted her to that position. see the exempt group that is certainly had controversy over the last couple of years. >> because she is a superb civil servant. >> soshi at nothing to do this? i can't speak to it individual cases but generally we provided horrible customer service here. horrible customer service. whether it's politically motivated or not is a completely different issue. >> your time has expired.
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>> thank you mr. chairman. gentlemen thank you very much for a testimony and let me key off of something mr. miller you said. you said foolish mistakes were made. i think the president actually said it better. he said that the handling of those tax-exempt applications and that process, at the irs was outrageous and intolerable. no excuse. and as much as we know that folks at the irs have a thankless job because they have to go and tell their fellow americans that they may be audited or they have to do this work understaffed, we have to maintain the confidence in the system because if it's a voluntary system of the payment of our taxes so you are right it was a foolish mistake but the president is even more correct that it was outrageous and intolerable.
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now let me also focus on something mr. george that you said when you were asked was there any finding or evidence of political motivation here? you said no. >> that is correct, sir. >> so what we find is a situation where inexcusable activities to place because it erodes the confidencconfidenc e of the american people and a system where they participate voluntarily. if there is a place of public service where you have to have the highest level of conduct and standards is that the irs and so mr. miller i think it's important for those who are in positions of authority that the buck has to stop somewhere and i think that is exactly what we are saying. that is not to diminish the good work that is done by anyone by the irs over the years so i hope you understand you are here today talking to us because we need to get to the bottom of
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this. we need to clean up and clear out so we can go back to the business of making sure that people respect the fact that we have a voluntary system of paying our taxes. having said that let me ask a question of mr. george. in your report indicate and i think i'm quoting correctly here, there appears to be some confusion by the determinations unit specialist and applicants on what activities are allowed by the internal revenue code section 501 or allowed by 501(c)4 organizations. we believe this could be due to the lack of specific guidance on how to determine the quote primary act tiffany of ac for organization. regulations state that see c-4 organizations should have social welfare as the primary activity of their mission. however, the regulations do not
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define how to measure whether social welfare is an organization of's primary activity. so mr. george, a question. could some of these delays in processing some of these applications been avoided if there were clear guidance on section 501(c)(4) organizations in with their primary at tiffany's constitute? >> the direct answer is yes, sir but i should also note that the determinations unit did seek clarity from washington headquarters and it took months before they received a response. >> and that's a great way to lead to mr. miller. i think what we have been saying for quite some time many of us is that there is not clarity in what is social welfare so you have many people or organizations and nonprofit organizations, the good guys i will call them who are trying to do good work and they are being
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tainted by some of these organizations out there that are doing nothing more than political at kennedy because the supreme court gave them license now to go ahead and use a nonprofit and nonprofit status to go out there into politics. is the law clear mr. miller in your mind on what is political campaign activity? >> no, it's very difficult, sir. >> can you distinguish between section ivo when c-4 organizations and say a section section 527 political organization? >> that is difficult but presumably the level of clinical activities and expenditures needs to be less than the 501(c)(4) area. >> let me suggest to you mr. miller to go back to the opportunity with your fellow employees at the irs thank you mr. george is your capacity thank you for your service to please communicate that we need to get you all to give us your
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sense of what is the best guidance so we don't have this proliferation of organizations that are abusing their nonprofit status at the taxpayers expense. they get all these write-offs. so we won't run into this situation again in the american people can have confidence in their system and the government and i think you and mr. chairman nye yields back. >> mr. riker is recognized. >> thank you mr. chairman. mr. miller i have about 15 minutes to question you but i only have five. i am disappointed at what i'm hearing. i don't remember and i don't recall and i don't leave, i don't even know who investigated the case but yet you say it was investigated but you don't even know who investigated. i'm puzzled by that. you are not assuming a lot of confidence in this panel and across this country but i want to go back to your version to the word target or targeted.
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he said there was no targeting because there was no intent. notwithstanding the intent of the irs personnel would you not agree that certain groups were treated differently because of the name or the policy position? >> no, i believe sir -- >> was it created differently? bat is that is the question, because of their policies position or their name? >> that is as a yes or no question. >> no one was treated differently? >> may i answer? i would like to be broader than yes or no. my understanding of the cases that went into this queue is that it included elements from a political spectrum and that of the 300 cases that were looked at by the treasury inspector general, 70 of the 300 head tea
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party in the name. my understanding is the organizations -- >> excuse me, mr. miller? it is my time and i'm going to take it back for now. i'm not going to be delayed here. so your answer was no, no one was treated differently? taking it back to mr. -- question you need the tea party have been automatically subjected to scrutiny and you have admitted that today. do you acknowledge her investigation whether certain groups were being treated differently, whether there was an intent or not, didn't this committee have the right to know? >> i answered all questions truthfully, sir. >> didn't this committee have the right to know the groups are being treated differently, that you have this group of 200, 300 whatever the number was, did not this committee have the right to
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no? >> i answered all the questions that i was asked. >> so your answer is a nonanswer once again. >> it is an easy question. do you not think the committee has the right to know all the information that you knew? mr. miller, mr. miller, does this committee have the right to know the information that you knew? yes or no? you testified before this committee mr. miller. please. you testified before this committee and he did not provide the information. you did not share the information that you knew so my question is do you not believe that this is the united states congress here that you are accountable to that is accountable to the american citizens across this country. do you not believe that it's your job to provide us with the information that you knew so
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that as you said the people of this country can be properly served honestly? you are a law enforcement agency for crying out loud. i was a cop for 33 years. you raised her right hand today. did this committee have the right to know what you knew, yes or no? >> i answered all questions truthfully. i also will tell you that -- >> i'm going to go to mr. george. you're not going to cooperate with me mr. miller and you have been uncooperative during this hearing. mr. george, we have heard that an early draft of your report indicates you are able to determine who initially directed the irs employees to target groups based on their political beliefs, is that true? >> that we were unable to correct. >> mr. miller you are the commissioner. who is responsible? you conducted the investigation.
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who was responsible? >> i don't have that name, sir. >> why don't you have the named? did you ask anybody? >> i don't have that name either. i would be glad to provide those names. >> who did you ask? >> i asked the senior technical adviser. >> what is the senior technical adviser's name? >> nancy marks. >> what did nancy tell you? who is responsible? >> i don't remember to be honest with you. >> you don't remember again? >> time has expired. the committee will recess for 15 minutes. [inaudible conversations] [inaudible conversations]
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[inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations]
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[inaudible conversations] [inaudible conversations] >> as you heard the ways & means committee taking a break. there are a couple of votes on the house floor and they should be back in 15 minutes or so. they are hearing from the outgoing acting irs commissioner steven miller and also the inspector general russell long. the testimony as possible will go through the middle of the action today. we will have live coverage throughout the day here on c-span2. while we have this opportunity we are opening up our phone lines to get your thoughts on what you're hearing from the th numbers numbers for
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democrats 202-58-5385 and republicans (202)585-3886 and all the others, (202)585-3887 so make sure when you do call and mute your television or radio and we welcome our c-span radio listeners to the conversation too. let's go to allison and sugar grove illinois on our democrat's line. you are first up, go ahead. >> caller: watching the ink's congressional hearings is like a watching a prosecutor on a bad examination. they give you the facts and never let the witness answered the question. they just want to put it out there and then twist the answer or cut off the answer and say that the witnesses are not answering. i don't understand why they don't ask the question and let someone answered and why this has to be about political gain
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instead of just what happened, why did it happen. it seems like the answer is more for the influx of all these political groups trying to get status of nonprofits and the irs needs to come up with a method by which to discern who is really a political group and are they really -- [inaudible] and they are not really asking questions for answers. they are just getting their political agenda out there. >> host: let's go to or republican line. brad, hello brad? regarding there? go ahead with your comment. >> caller: i just want to comment on the irs scandal. i believe that watching this i think there's a greater form of deception from the higher government especially when you go to looking at you know
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private organizations, whether democrat or republican. to me, it's almost like you know there there's a fine line between socialism and -- and we are defining something as higher than the state and that is wrong. it's if the ethical process does not do something -- [inaudible] >> host: the reasons the ways & means committee is holding a hearing today because of the treasury inspector general's report on the use and the targeting of conservative groups via the irs and certainly conservative groups although the treasury inspector general threshold george testifying this morning saying the report quote did not find that the agency's decisions were motivated by politics. the entire report is linked to our web site c-span.org. oklahoma city is next lead on independent line.
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>> caller: yes, my question is, of course we are all outraged by what has happened and thinking that someone is targeted is definitely an outrage however my biggest question is this. why should a political group organizing around a 501(c)(4) status or any tax exempt status be allowed tax-exempt? i believe if you're going to have a political statement you have a right to have that but you don't have a right right to have a tax-exempt and no one is asking that question, why are those groups allowed in there and i think when we look at that question that is when the real meat of the subject will begin to be talked about. >> host: lets you with the folks on twitter are saying using the hashtag irs. this is from jennifer re-tweets does the gop think they sound intelligence with their method of question and another from greensboro north carolina. it's fair simple transparent and does the way the agency's
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ability to persecute. the one from cr says i think it would be more efficient to replace miller with a cardboard cut out for congress to yell at and finally from naomi, i don't know who raises these folks but none of them have a conscience that tells them that they must tell the truth. the hashtag is irs. christine and grande new mexico. democrats lined? regarding there? i think we lost bill in orchard park. next we go to orchard park. where are you calling from? >> caller: i'm calling from wilson new york. >> host: on the republicrepublic an line, go ahead with your comment. costco. >> caller: the hearings going on for the last week on benghazi and all these other things, all these people on these different committees, they don't allow the questions asked by both sides. why can't they just answer truthfully and honestly on
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what's going on instead of doing what they are doing by dancing around the question? either they do know what's going on or they don't or they are lying which is what you do to protect someone. who is he protecting by lying? he is going to resign. obama fired him and he is done at the middle of next month anyway. >> host: their life at the ways & means committee this morning to look at allegations of targeting of conservative groups by the internal revenue internal revenue service. the committee is in recess for a couple of votes on the house floor. we wanted to show you the comments of california republican nunes who asked steven miller of the outgoing irs, why he is resigning. >> you really are not taking any
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acknowledgment that you knew anything and that you didn't do anything wrong. you said that numerous times on the record today, that you did nothing wrong. so i find it hard to believe, why did you resign or why are you resigning? >> i never said i didn't do anything wrong mr. nunes. what i said is contained in the questions, i resigned because as the acting commissioner what happened in the irs whether i was personally involved or not, it stops at my desk. and so i should be held accountable for what happens. whether i was personally involved or not. it's a very different question, serve. >> host: from the testimony of short while ago live coverage continues when the committee gaveled back in continuing your calls. mats on the independent line. >> caller: yes, the irs has way too much power and they are abusing it at this point and the
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american people we need to go to a flat tax and totally eliminate them. they could do something that's good for the country by fixing the roads and bridges. >> host: a democratic caller on the democratic line anyway. >> caller: do you think that the 501(c)(4) came to the supreme court should it not have been incumbent upon congress to look at the law and clean up any and all discrepancies because if the matter went to the courts, it means there are differences in interpretation between the different groups. it is the congress that sets the law. therefore when a matter reaches the supreme court, it should be the congress's duty to come back
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and look at that law and clear up and clean up any discrepancies and congress fail to do that. >> host: do you think the supreme court decision muddied the water about these political group's or issue groups? >> course it did, of course it did. evidently there were some groups that should be 501(c)(4)'s but there are some that are not serving a social necessity. the irs directly -- political group. it is congress's duty and they are writing the laws and that the laws are challenged they should look at them and clean the loopholes up. >> host: do you know the differencdifferenc e between a 501(c)(4) and its a 501(c)(3)? >> caller: i don't know the exact difference.
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it's based on the amount of money. the way the law is, it doesn't, a 501(c)(3) are open and the 501(c)(4) are specifically for work not even on a national basis but working within your states etc. for social, mostly for social work. >> host: tony thanks for sharing your knowledge on that and thanks for joining the conversation. ronnie is an cottoned in alabama, republican line. hi. >> caller: hi, how are you doing today? i would like to know why every time a congressman that is a democrat asks the gentleman a question, they all were saying well this is just a mistake and we need to clarify that. if it was such a mistake, why
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was it that we didn't hear a thing about it? it always needs to go to the top but no one needs to take liability for it. when the republicans tried to find out why this was done, all the gentlemen could say is wow, i answered that question, i answered that question. it seems like all he is doing is covering his tracks to where he got the right to do it from -- and it seems like everything is gone down from there. >> host: lets check facebook at facebook.com/c-span. we posted a question for you and a posting last night about her coverage. here's what devin has to say. gary fisher says why do we permit the irs to have this power over our lives when we can have the a fair tax system? mike's is interesting that in levens opening statement talking about sandra levin he warned
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republicans about the hearing being apolitical and then he goes on to make a political in his first question. facebook.com/c-span is where you go. connie is in brooklyn springs west virginia on our democrat's line. >> caller: yes, i would like to just point out one thing that has worked right in this whole problem with the irs and that is the i.t. system. it brought the problems to light as it should. actually it has been slowly in assisting them and getting them resolved or enabling them to resolve. it acted too slowly and maybe it was wasn't comprehensive enough in its analysis. the problems in those areas partly due to the -- of governmental agencies and the igs are not trulyi
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their independence has to be bolstered. and that would help them to work faster. i would like to just you know endorse what tony said earlier. he brought up congress's failure to address new issues as they come up and i would add to matt, exercise oversight over these programs. they have a hearing hearing like this in the zipper grandstanding for grandstanding and political purposes instead of really exercising oversight. those are my comments. thank you. >> host: connie points out the inspector general's report the inspector general the treasury inspector general who is leading that report is testifying this morning before the ways & means in addition to mr. steven miller. you can read that report on our web site at c-span.org and the ranking democrat coming back into the room. let us see if we can get one more call here.
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tony and charlotte north carolina. tony go ahead. >> caller: yeah it just seems to me that the citizens united, the rules were not clear number one. and obviously the workload of the irs increased threefold, so they were trying to separate the workload in such a way to move it along in the process. from the outside looking in as an businessman i think i can understand trying coming of an increase in the workload and how are you going to get this thing done? it's unclear. the waters are muddied and the republicans just seem to continue to, on as vicious. again, let's fix the problem. that is my comment. >> host: a couple of members drifting back in to the brim. there were a series of votes on the hustler wrapping up and you saw moments ago mr. russell long who is the inspector general
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said to testify once more as the committee is expected to go sometime into the middle of the afternoon. we will continue with a couple of more calls. minnesota, democratic caller. >> caller: yes, my question is somewhat nonpartisan really. there are some 70,000 applicants for 501(c)(4)'s that was referred to. what percentage of that number were considered conservative and what percentage were considered nonconservative? of those two groups, the conservative group, a fat of that percentage that were deemed conservative, what percentage were audited? of the nonconservative group, what percentage were audited? >> host: i don't know your questions answered but i know --
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decoder web site c-span.org we have link to the report. it's a pdf link to the report and i believe they touch on some of what you're asking for frances. brad is in weaverville north carolina on our republican line. hi there. >> caller: how are you today? i was just wanting to comment on some of the callers that i have heard colin. this is gone from scandal to scandal since obama took office. everybody says well the conservatives are getting hostile. it does it make any what question is asked, whichever scandal or whichever thing they are investigating, nobody knows nothing about anything. >> host: brad, thank you for calling in. we are going to end it right there for the phones for right now.
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possibly later on we will be able to open up our front again and certainly you can join the conversation on line at facebook.com/c-span. we will stay here live until the ways & means committee gavels backend. [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations]
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.. [inaudible conversations]
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>> the committee will come to order, if everyone will take your seats. mr. doggett and recognized -- is recognized for five minutes. >> thank you, mr. chairman. what happened here is outrageous and inexcusable. and unless those of us who strongly disagreed with the tea party on many issues defend it from any impairment and allow it to be as long as it wants to be, we impair our democracy. mr. george, many charges have been made here this morning. you as inspector general under ti
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statutory responsibility as inspector general to prevent and detect fraud and abuse in the programs and operations of the irs, do you not? >> that is correctness or spent as best i can determine you fulfill that responsibly faithfully enforce rightfully. let me ask you if using the extensive audit and inspection powers you have as inspector general, you've found any evidence of corruption -- corruption of the our? >> no, not at this time. >> let me ask you with your extensive powers if you have found that our tax system is rotten at the core? >> know. definitely not rotten at the core. >> yes, sir. let me ask you if you come using your statutory powers and filling responsibilities, determined that the irs the pics and who loses in american? >> i don't believe that is the case. >> you have not, and the statements that were made in
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very inflammatory charges at the beginning of this hearing, it is obvious have no basis in fact at least any fact that is yet been demonstrated this morning. it is important that in addressing and fully correcting one from we not be involved in other wrongs. such is encouraging the proliferation of secret corporate money, not just the proliferation evolution of our democracy by that money, but that it be taxed subsidized secret corporate money. that we not permit those who have a fundamental disagreement with the progressive tax system using this incident as a basis for shifting even more of the burden of financing our defense and our essential government services onto working people. that we not permit those who have an agenda that has now been voted 37 times to try to undermine the full and effective implementation of the affordable
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health care act so that the health care crisis is ended for families across this country. that's what's at stake here. that's what's been discussed here. it is not based on any fact associated with this investigation to this date, as indicated by the republican appointed inspector general whose job it was to determine whether any of these charges have merit. let me move to an area where i disagree with some of my democratic colleagues and their comments this morning. i don't believe there's any lack of clarity in the statute. the statute that is in effect has been in effect for decades, and it requires that before there is tax exempt status, as mr. lawrence o'donnell, as the crew group, the citizens for responsibility and ethics in washington has pointed out any petition, you are to be denied
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his status if you are not exclusively engaged in social welfare according to the statute is that not correct? statute is explicit. it uses the words exclusively, the regulation of the irs adopted 30 or 40 years ago uses different language. >> if this is addressed to me, mr. doggett, i have to demur to secretary. that's a tax policy question and i'm not in the position -- >> i'm not asking for tax policy. i'm just adding for clear reading of the statute. and a clear reading of the statute that has been in place for decades and is in place today says that there should be a denial of tax-exempt status to any group that is not exclusively engaged in social welfare operations, and it was only after a regulation adopted long ago, long before any of you were at the irs, that changed exclusively to primarily that there was any discussion for
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this section to be involved in this operation. operation. >> mr. doggett, i do know that we have indicated that some clarification from those in the policy area of the department of the treasury might be needed in this area to help clarify again. >> in april, citizens responsibly and ethics in washington filed a petition with the treasury department and the irs to address that. if the statute, the clear wording of the statute had been followed, we would not be having to deal today with selective enforcement. we would have any problems with enforcement in this area at all. and i hope that the petition is honored and responded to promptly as i believe you have fulfilled your responsibilities, mr. george as inspector general. thank you for just one. mr. miller, thank you for yours and for stepping aside. thank you. time has expired. >> thank you, mr. chairman. mr. miller, you may object to the word targeting but it's used
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in the ig report 16 times. so it's a common understanding of the word, so i would just suggest that it's a well-settled doctrine and when the waste a lot of time parsing on it. you admit that you spoke with ms. lerner about the planted question before him. and tells more about that conversation? >> i did not speak to seal gioconda believe i did talk to lowest about the possibility, now that the tigta report was finalized, now that would knew all the facts, now that we had responded in writing and everything was done, didn't make sense for us to start talking of his in public. >> could you walk me through the logic that ended in your mind at the time we that would be a good idea to make a public disclosure to the american bar association rather than coming and following up on your duties to disclose that to the how? >> we're going to do at the same time i believe. our attempt was to talk to you all at the same time.
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>> but that didn't happen, didn't get? >> it did not happen i don't believe. >> what other recollection to what other expense did you have when you're talking with ms. lerner about this scheme to the planted question at the ada? >> i'm not sure what you're asking. >> i'm asking, what's your recollection of that conversation? >> we tal talked about what woue said and how we might do it. >> where did the conversation take place? >> i believe it was over the phone. phone. >> what day did the conversation take place? >> i would have to look back at my notes. >> you have notes on that? >> i would have to try to find and spend why did you say you have notes if you don't think you have notes? >> serve -- >> police. you have notes or don't you have notes? >> i don't know. >> okay. let's shift gears. a little while ago you were being, you engaged with mr. reichert on the question as to whether you knew that his
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committee, this whole idea of does the committee have the right to know this information. and then you sort of shelter just off in this idea of, well, i've always told the truth. let's set that aside for a moment. now, you're a lawyer and i am a lawyer. you know in the process of discovery, mr. miller, when you find subsequent information, council has a duty to disclose that to the opposite party. there is no perry mason moment. there is no gotcha moment. there is no litigious situation where someone comes in and says, oh, we're just showing up, your honor, with this information and we have not disclosed to the other side. don't you acknowledge that you had a duty in based on your testimony before this committee of which are actual knowledge was? didn't have a duty, mr. miller, do, forward and disclose that to the committee, based on all the cascading inquircascading inquit
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happens on the ways and means committecommittee directed to? >> i don't believe so. what's happening was i was in possession of some facts, was not in possession of all facts. facts. redundant internal review to see what we need to do to get these cases moving because again the processing was bad, the listing was bad, those are two different pieces we were dealing with. tigta was in at exactly the same time. they were getting all the facts. we're going to wait for them to get the facts so that it didn't come in and either mess up their investigation or otherwise give you facts that were not correct. >> so you weren't concerned about the timing of the tigta investigation when you and ms. lennon made the decision to move forward and do the planted question from is that right? >> it was done or quit all the facts and we had made a written response. >> i understand it. so in other words, you had the actual information. the to tell the of the information that you're describing today you had it all in your possession at the time at which you were under a scheme with ms. lerner to go into a planted question, is that right?
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>> i sort of object to the term scheme. we have information that we are reaching out -- >> and understand, a written are not written down contemplating -- [talking over each other] >> you had all the information, isn't that right? >> we were reaching out to the committee at the same time. e call to try to get one take? account of. >> you try to get on the calendar. is that all you got? >> the truth. >> okay. you know, i find it incredibly ironic. on the one hand, you were arguing today that the irs is not corrupt. but the subtext of that is you're saying, look, we are just incompetent. and i think it, it is a perilous pathway to go down. there is, they're sort of this notion that hasn't been satisfactorily answered, and that is, if the targeting wasn't
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targeting, is the targeting was in based on philosophy, holcomb on conservatives got snagged? >> they didn't, sir. organizations from all walks and all persuasions were polled in. that's shown by the fact that only 70 of the 300 organizations were to party organizations are the ones that were looked at by tigta. [talking over each other] >> i >> in contradiction to the ig's testimony. i yield back. >> time has expired. mr. thompson is recognized. >> thank you, mr. chairman. i appreciate the fact we're having this hearing, and one want very much to get to the bottom of this. more important i want to make sure or as important i want to make sure that we are able to do all that we can to prevent it from ever happening again. for all the same reasons that many of my colleagues on both sides of the aisle mentioned today. and i want to associate myself with the outrageous and
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intolerable group as to where i think this ranks. what i would like to know, general george, first, in your testimony you had a section that is entitled results of review where you say the irs used inappropriate criteria for identifying these organizations. is that legal? >> it's -- legal? i'm trying to get a sense of -- >> inappropriate criteria? >> it is not illegal, sir. >> you enumerate them come inappropriate criteria were developed and stayed in place for a total of more than 18 months, is that the legal? >> it is not illegal but it was inappropriate. >> i'm just trying to get a sense of -- >> if i may come it is contrary
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to treasury regulations and other policies then in place by the department. >> understand. the substantial delays, is that illegal or inappropriate to? >> it is inappropriate. >> than the third, the unnecessary information, illegal or inappropriate? >> inappropriate. >> thank you very much. you also outlined recommendations that you think are most critical and explain whether if they are enacted enough to prevent this from happening again. are they? >> the vast majority are, and the irs agreed to the vast majority of them. >> and do you have some mechanism, some matrix for making sure that they are put in place? is there a plan to go back and review these and to continue your good work of review to
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ensure that your recommendations are being followed out? to ptecto therecommendatioenous citizens of our great country? >> mr. thompson, you anticipate almost our entire future plan. we are both going to take a look to see whether the irs has successfully implemented, and as i believe you indicated, or selected, the president indicated that he was going to ensure that the irs complies with those recommendations and it would definitely be our intention to follow up to and guarantee that that has occurred. >> one of the responsibilities that we have is also an oversight responsibility. is there something in your recommendations and in your subsequent plans that will keep us in that loop? or are we going to have to find out about this outrageous and intolerable behavior through some other means of?
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>> mr. thompson, we publish an audit plan each year lighting at which audit that we're going to engage in. we request information or solicit, we solicit ideas in congress from the administration and from anyone who has a tangible role in the system of tax administration. and it is our intention to once again do that, and there's no doubt in my mind that we will follow up with congress on this matter on a regular basis. >> thank you. mr. miller, what are your obligations in regard to reporting this type of behavior to congress? >> i'd have to go back and take a look. i don't believe there's an obligation. what happened here, sir, we knew tigta was in. i knew tigta was in, and make him almost immediately when we were involved. we had had a meeting with
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mr. george and company in may where there was an indication they would be done this summer. our understanding is they were going to get the facts, they're going to get them out there. there was never the intention or believe that these facts would not come out in full. >> general george, is there a need to pass specific legislation that would make it more difficult, or hopefully impossible, for this to happen again, and to strengthen the requirements for reporting when something this outrageous and intolerable takes place? >> i will answer your question in full but i have to again preface that the secretary has delegated tax policy questions to the assistant secretary -- >> that's not a process question. >> time has expired so you can supplement that answer in writing if you wish. mr. gerlach is recognizer five minutes. >> thank you, mr. chairman.
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according to the inspector general's report the irs toward its inappropriate handling of certain tax-exempt organization applications in early 2010. into swing back to some of the prior testimony, mr. miller, you indicated that you never spoke, excuse me, before ask that question let me highlight two pieces of media articles that appeared also won in 2010 as well is one more recently in september 2010. there was an article in "the weekly standard" concerning the concerns of the coke industries attorney that there had been confidential taxpayer information, potentially in the hands of senior administration officials that were part of an august 27 on the record back groundbreaking but subsequent just a few days ago there in the "usa today" with a -- with a calm an op-ed by jedlicka neck with a national conversation of marriage who indicates in that
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op-ed that the release of these organizations confidential tax return to the human rights campaign of the canary in a coal mine of the irs corruption contrary to assertions that the targeting of tea party groups was an error in judgment by low-level irs bureaucrats. the release of this confidential data to a group of this nature suggest the possibility of implicit at the highest level of politics in government. so back to the question of whether there was any information sharing of taxpayer records, taxpayer returns with anybody outside of the irs, mr. miller, you indicated in testimony some moments ago that you never spoke personally or communicated personally with anyone in the white house about the sharing of confidential taxpayer information, is that correct? >> i believe so. >> do you have any reason to believe that at some point you did from january 20 to speak to someone in the white house or communicate and another with
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somebody in the white house about the sharing of confidential taxpayer information? >> i don't think thawould happen. >> your answer is no, you did not? >> i don't believe i did. >> are you aware of any of the irs official from that time period to present the communicated with them but in the white house concerning the sharing of confidential taxpayer information to somebody outside of the irs? >> can ask, are you asking whether speedy i'm asking whether you are aware of anybody else in the irs that ever from january 2010 to the present communicated or spoke with anybody in the white house about the sharing of confidential taxpayer information? >> so, i don't believe so, but what i'm confused about, i apologize but just so i am clear of what i'm answering, all you talk about whether i believe we shared information? >> whether you have information or believe that any confidential taxpayer information, taxpayer and being individuals, organizations, business, all the information being shared with somebody outside of the irs in violation of section 6103?
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>> i have no knowledge of the. that's a question understand, thank you. >> you did indicate he did speak yourself with officials regarding the sharing of information. i'm not saying the white house now comprising the treasury department. if i wrote that correctly, you do speak a summit in treasury about that at some point, erect? >> i don't think so. again, let's be clear. did you ever the dish i'll ask the question more clearly and directly. did you ever speak or communicate with anybody in treasury department was not within the irs about the sharing of confidential taxpayer information in violation of 6103? >> can i rephrase it and you don't -- >> no. i don't know -- >> if you're asking me whether do not ever share 6103 speeded i didn't ask that. did you ever communicate or speak with anybody at the treasury department not within the irs about the sharing of confidential information, taxpayer information?
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>> i don't believe so but i don't know what you're talking about the subject which would be fun to talk to them about or -- >> that's what i'm trying to inquire about the compound but what you did, what you knew and when you knew that andrea spoke with. you are saying today that in no time from january 2010 to present a just because someone in the treasury department by fishing of confidential taxpayer information? >> what i'm saying is the following. spent i would like an answer to my question. did you ever do that? >> data ever talk to them about the sharing of -- >> or communicate to them i've been by e-mail, might even by fax, might even buy sign language spent i can tell you categorically i've never shared information. that i ever talk to them about the rules around? i don't think so but that would be permissible. >> were you aware, i think jim and can't question, were you aware of news bring about national organization of marriage and the concern they had about the sharing of their confidence of information from you indicated on the record that you aware of that news story. so on that story or any other
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story did utah coquina key with anybody outside the irs in treasury about that issue? >> i don't know. i don't believe so the speak will you check all of your records, all of the notes, all of your e-mails and get back to skimming about whether yr answer is different than what you're providing what has? >> yet, but what i can take in -- >> i have limited time. spend time has expired at this point so why don't we move on to mr. kind. >> thank you, mr. chairman. thank you, gentlemen for your testimony here today. i think it's been eliminating every helpful. mr. miller, let me start with you. i assume you agree with the premise that if there is eight agency and the federal government that this is the above reproach. no hint of bias, artisanship, mistreatment, unequal treatment to any individual or any organization. it is the irs. >> i agree and that's what is so sad about this. >> the optics of what happened there in the cincinnati office in reviewing the applications, this is what comes from that, is
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that right? >> the perception is bad. >> it's my understanding based on the specter just report and recommendations the irs has taken that up and distributed the best they can to implement that to ensure that this doesn't happen in the future against? >> we will government all recommendations and it will not happen again. >> mr. neal asked you about the accountability of who is being held accountable and why. you rendered your resignation to the president and his accepted that as commissioner of the irs, is that right? >> i have, i have done so to the secretary. >> okay. any other incidents of accountability as far as those at the cincinnati office, those in charge of the cincinnati office, the development and use of this country? >> i think i mentioned there were two incidents in which there was counseling suggested and it was a reassignment of someone. but what i should say and what i said in my opening statement is we now have possession of the facts with respect to the tigta report. now is the time we should be
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looking at that. >> in the pushback from the irs with inspector general's report and some of the recommendations that they are making? any difference of opinion? >> there is none on the recommendations. >> is there a rule for the congress to be working with the irs to ensure that something like this doesn't happen in the future? i'm thinking specifically of post said united and 70,000 applications that was submitted, and a doubling understand of (c)(4) applications. you think there is significant personnel -- sufficient personnel to expedite the review of these applications? >> there is not sufficient personnel spent i don't think led many recommendations on the other side as for allocating our resources to the irs that your sufficiently staffed in our to do with the huge influx of applications that the irs is experiencing right now. i think there is a role for the congress and we've got to share some response that as well but mr. george, let me ask you. i think part of the problem is the definition of the criteria
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of primarily engaged in social welfare seems to be an inherently subjective criteria with no clear bright lines or clear rules. i think the irs was trying to further define that to the division in cincinnati but is ere further tightening of the definition which would be helpful to irs personal when it comes time to review the applications? >> the answer is yes. >> is that something has to be done in trouble with an irs or is there a role for congress to intervene and try to further define and present some our objective and bright line rules when it comes to reviewing social welfare applications? >> it's my understand that the irs has the authority to do this on its own without legislative fixing. >> this committee will need to be working with the irs, too, to ensure that gets done because otherwise it's going to be an inherently flawed human process of subjectively applying this criteria, either, special with the huge influx of applications. some of this has been delved into. i think it's so important that he needs to be reiterated,
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mr. george. i apologize if you think you may have majors of clear on it but according to your report you for no bias or partisanship behind the development and the use of the criteria for selecting applications in the cincinnati office, is that right? >> that is correct to serve. but we did find gross mismanagement in the overall -- >> that is clear in your report. did you find anyone that anyone outside the irs was involved in the development and review of? >> not at this time. >> not the white house or treasury? >> that is correct. >> thank you, mr. chairman. >> i will recognize dr. price for five minutes. >> that you mr. chairman. i think if i'm sitting at home trying to figure out what's going on here and listening to the testimony and the remarkable revelations some of these questions, you get some snickers after some of them but you have the federal government asking what books you read, and the federal government asking whether not you know anybody in
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your organization is going to run for political office. this is chilling stuff. this is very, very serious. mr. miller, do you accept the findings of the ig report? >> we do, sir. spent one of those funny is that groups were targeted, do you accept that tiny? >> i would not, i would not characterize it as part of -- >> you could understand what others believe including the inspector general would leave groups were targeted? >> i think the groups that were put into the centralized grouping would have gone in, it would'vwould have gotten whethee done the correct thing or -- >> you have described a list of criteria being used to identify these groups as obnoxious, correct? >> correct. >> it's not just tea party groups, it's not just conservative groups. in fact, religious organizations, are they not? >> i don't know that.
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>> are you not aware that there are religious organizations that were identifieidentifie d by the list of criteria that were formulated? >> actually unaware that they were. and i say that as though i don't know. i've looked at the list but very quickly. >> are you aware there were some baptist church organizations that were identified for greater scrutiny? >> i was not aware of that, sir. >> who is sarah hall ingram? >> she is an executive at the internal revenue service who does the afford will get back to work for us. >> that's where she works no? >> yes, sir. spent where did sh you work durg the period of time under question here in tip -- 2010-20 to? >> someone has corrected my prior comment. so 11 and 12 i think she was already working on affordable care act. i don't know when in 10 we made that. >> did she ever hold the title of director of tax exempt organizations for the irs of? >> she held the division commissioner title.
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>> associate responsibly over much of the concerns and discussion that we're having today, is that correct? >> at the time she was division commission, yes. yes. >> which have known about this list of criteria that has been formally become had been formerly? >> i have no reason to believe that she would. >> that she would? >> yet, i have no reason to believe that she would. i don't think so. ..
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the context of the criteria listed what we are talking about today that the irs provided, quote, horrible service, unquote, correct? >> i think that's what you said earlier today. and the individual that was overseeing a portion of this and had responsibility for the provision of this, quote, horrible service, now sits over the entity at the irs that will determine whether or not people are complying with the rules of the griffin team, is that correct? so sarah in groome is not at the irs over control of the regulatory -- >> at most it was a period at the time that we would have to go back. i don't think the time line works perfectly to i would have to go back and check. there may be period of time she was still in the job but -- >> mr. a mcdermot said they wouldn't have any access to medical records so it would be
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unnecessary to gain access to medical records, correct? >> i can't -- it would be unnecessary. >> isn't that how you described the questions and the information that the irs folks ordaining for the list as unnecessary? >> i think -- are you talking about the letters that they are saying there is a parallel here in the expense of nature of what the irs has done what you care to characterize the unnecessary work is it illegal what they have done? >> it is absolutely not. estimate it's not illegal what they've done? >> so, let me understand the question. what is your statement as to what is illegal? >> do you believe it is illegal for employees of the irs to create less to target individual groups and citizens in this country? >> i think the treasury inspector general indicates it might not be that others will be
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able to tell that it >> what do you believe? >> i don't believe it is. >> blank mr. sherman. >> don't get me wrong. it shouldn't happen. >> mr. blumenauer is recognized for five minutes. >> blank, mr. chairman. i appreciate the opportunity for our being able to listen to the witnesses to try to develop the record and people putting forth their own ideas, their own questions, clarification. i think mr. inspector general, that you have provided a tremendous service with of the report straight forward, identifying mismanagement and appropriate activities, and i hope that people will be able to actually read the report to reflect on a. i appreciate you being here, mr. miller. it's not the most comfortable. i appreciate that you as a career civil servant accept the
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responsibility even though you hadn't done these things directly and resigned. i mean, it is an error of responsibility you don't often see in the political arena i will say. but, i am hopeful that we can continue to direct to make sure that no political entities are subjected to inappropriate activity on behalf of the irs. i appreciate some of my colleagues talking about efforts that we can do to clarify bill walsh and regulations together to be able to make sure that there is less than devotee and that there are better standards. but i also think at some point you will be interesting to reflect on the congress's bolin and with the chairman referred to as pretty strong terms about a tax code. when i came here in the 104th
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congress there were 114,000 employees in the irs. since i've been here, congress in its wisdom has expanded the code, made it more complex and cut dramatically the men and women on the front lines to deal with that. there an adequate training budget we've had this testimony just across the capitol before the senate this last week. and i really hope that there is an opportunity to think about how support the integrity of the internal revenue service, not just by making sure that there is accountability and there is clarification, but we rely on it to be able to be to function. and congress has slowly been starving the budget of the irs
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at a time when each of those employees dollars spent on those employees gives the federal government about $214 in revenue a of for us to not make sure that it adequately staffed from adequately trained adequately equipped invites short cuts, makes it harder to have the oversight and the accountability and harder for the overall performance. i think that is inexcusable to cross the line. i think it's important that we bear down and that we understand and make sure that it doesn't happen again. but i also think that as the congress has made the code more and more complex given the irs fewer and fewer resources to administer it to make it difficult to train, i think it undermines the ake a
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complex entity that relies on self reporting and people having confidence in it. and i'm hopeful that this isn't something that we slide past. i appreciate mr. tremaine your interest in simplifying and informing the code, but i also hope that we look at the task that they've been given, the budget that they've been given and think a little bit about maybe the rate of return that would more than pay for itself if we invested in training and management and having more than 150 people to deal with the avalanche of these applications. i guess that wasn't so much a question, but it is something that has occurred to me. and i know, mr. miller, you have reference to the stress that that group is on and how hard it is to keep track and at some point if you would provide to the committee not putting on the spot now but some reflections on
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what it would take to do this right, i think would be a valuable part of the committee record going forward because we all want it to have integrity and we bought it done right and we want to treat our employees and the taxpayers properly to get a thank you. >> mr. buchanan is recognized. >> mr. miller i want to talk a little bit about the culture of the organization. as we are looking at the biography, 90,000 employees, 12 billion-dollar budget. you've been there 25 years. i am concerned -- i guess to start off we have a mission statement. i'm very concerned about the bread into the death of maybe what's going on. i think a lot of employees probably do a good job but i've been a person that's been in business 30 years and have run larger organizations. you have a mission statement in terms of talking about working for the american people doing what's right and playing by the rules. is that something that is internalized or is that just
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something on the web site? >> i believe, a congressman, it is internalized and the vast majority of our folks are hard working and incredibly honest people. i'm going to tell you and you should hear that as these discussions occur, as it is damaging to the morale of those people and it's probably ultimately damaging the sense of the voluntary compliance that underlies the tax system let me just say obviously there is a lot of good people at the same time we have a massive problem at minimum we do and this has to be dealt with. it can't drag on for six months to a year so we need to get to the bottom of it. the other thing let me ask in terms of that size organization, who is in charge? who is the boss?
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how does that hierarchy work? i ever ran a very decentralized business where i had a corporate structure but i had managers and partners in different operations how is the irs in terms of the union acting commissioner you've been there 25 years. who do you report to, who do they report to and at what point when something like this comes at who is involved at the next level? >> so, the reporting chain and the organization is -- there are two deputies reporting to the commissioner and the commissioner reports to the deputy secretary of the secretary. ultimately responsible. the commissioner and acting commissioner of the treasury. the treasury relationship is such that they would not be involved. >> who would be responsible for you? we basically asked if they
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reside or five years to you. ceramica would be the secretary lew. >> secretary of treasury. the other thing is -- let me ask you a there's been two people that have been -- were you terminated or fired? what happened? are you getting ready to retire? >> i was asked to resign and i will retire under the rules. >> on what basis do you feel like you are getting asked and maybe one other person i guess was asked but it seems like there's a lot of other people ideally in cincinnati and washington and other parts that have not been held accountable. >> i'm not sure what the question is to be if i can answer we are not done yet. we are not. we have the treasury inspector general's report. we have this sense of the fact. now is the time for those that remain, including the incoming acting commissioner to take those actions. >> let me mention this.
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it's been brought up with a couple of the ladies that work with sarah ingram. what is being done about those two? because there is a lot of concern about that. they ran a large operation and it seems to be a part of the issues today. i think that has to get dealt with in a very aggressive and clear way in the next week or two to the estimate i don't know whether it will be or not. that will be up to the new acting commissioner. >> let me ask you in terms of the new acting commissioner are we looking to get a permanent commissioner or is this going to be for a period of time? >> i don't have that information. i would assume however that we ought to have a nomination. >> i hope because i think at the end of the day leadership matters and getting the right culture and the right environment in the organization. it needs and credible leadership and integrity and we need to
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make sure that person, not so much the acting one of the permanent one is the right person going forward. i yield back. >> ms. schwartz is recognized for five minutes. >> thank you to appreciate the opportunity to ask questions. let me just say a couple things and then ask a question and i will tend to be brief. this isn't an easy hearing for you or for us. the american people deserve to be all to trust their government for the fairness and lack of bias and that was violated and that violation is outrageous and is unacceptable to us and i hope to you. there need to be changes. it's already happening. in the changes that you are making but we need to be assured that the changes we made things happen. investigations have to be done and changes need to be made to ensure the american people but we know that and we will not accept for the discrimination in
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any way. i think that is clear to all of us. the second thing i will say is the committee and the congress also has a responsibility to do this and our own questioning and our own demand for accountability and transparency from you, from the administration, from everything that happened, to do it in a way that is not political either. and we have to be very careful about that pitted and i would compel all of my colleagues to make sure that we also engage in this in a way that is clear and fair and long political. we all agree something has to be done and we should do it. my question is more broadly about what is going on in the divisions that handle the applications for the nonprofit status. i have heard in my own office that groups come to us and applied for non-profit status mostly 105c3 which was before the issue here, but the backlog
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of a year they don't understand why it takes so long, they don't understand why they are not clear about what's wrong with the application. they are not hearing back. given some of the cuts that we have made, non-profit groups in particular and the 501c3 in particular, but really looking to try to make up some of the gaps that are here to be able to raise money and contributions and a difference in the communities. i for one need to have better clarification about the criteria is, why don't they hear back, why the applications are taking longer than a year if there are problems with them what kind of questions you legitimately can ask and which ones you cannot and how we can move the process forward. we have every reason to ask those questions and get those answers on behalf of our
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constituents and again, it goes back to all of the nonprofit organizations. if there are reasons to be to the application and there may well be. we have to understand that better and so do the people making those applications. they shouldn't be in the dark about the criteria. they shouldn't be in the dark when it is sitting on somebody's desk or receiving more review. so if you can clarify for us now, mr. miller, or give some more information as we go for word about that criteria is and what we can expect and what we can explain and how to make sure that we are doing this right. and they are under investigation and getting those answers and correcting them and so that we can ensure the american people of the right process, the fairness of the process, the criteria that's being used in a timely and appropriate response of process to american taxpayers and nonprofit hopefuls nonprofit organizations.
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your chance to answer that. >> i think probably it is a big enough questions that we will follow-up in writing, but the process right now as i mentioned we have a limited number of people, 140 to 200 that work on the 70,000 applications that come in for the tax-exempt status. most of those are 501c3. 501c3 organizations get a number of tax benefits. they get deductibility of contributions, the ability in some instances to issue bonds. they get state tax exemptions, property tax exemptions, postal rate reductions. these are significant benefits in reduction to tax exemption and we have to look at them. we do. many of them are smaller organizations that should go through very quickly and some of them are large organizations that we need to take a look at. the largest hospital systems, the largest universities, there are some large organizations. did you look at particular issues within them and we will
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look for is their a private benefit, is their political activity going on? because again, no activities permissible, not a primary of activity can be political in nature. those are things that we try to look, try to move them along as fast as we can. we do not have enough people. estimate your about the criteria. >> i'm afraid the time is expired. >> this will be a continuing. >> mr. smith is recognized for five minutes. >> can you define public collectivity as a would relate to the agency and the applications? >> under the internal revenue code, the political campaign activity has some definition limits, you need a candidate for public office, and that is sort of what you need for it to be a political campaign activity under the 501c3 and the 501c4
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under the different roles. estimate is that the concern of the political activity that led to the centralization organization of reviewing the applications? >> i believe it was. the fact that we were seeing more applications indicating that they might be doing political activity and it is in the area that is very difficult for us. is it education? is it an issue had come in actual campaign intervention from the those are very difficult for us to parse out the decision was made to try to get them into one group and educate those people. how they started that process was one of the problems here. the other problem as i mentioned is the method of processing these cases come in and i think that the report goes into great detail the problems that we saw in terms of the lack of communication between pieces of the service, the letters that were going out that were overly
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broad and the complaints that we were getting from those that were given a remarkable amount of time to explain an awful lot of stuff to the estimate how many employees would you say would have been associated before the centralization and then after the centralization? >> i am not sure of the question, sir to use the macdill or greater in number, is that accurate? >> it might be. i don't really know the answer to that. it might have been the same number of people they were centralized versus being spread out. >> it was mentioned before in the testimony and questions that the lists were requested by the irs. is that accurate? >> in some cases, not all these cases buy any stretch of the imagination. >> and the acquisition of the lists did they ever lead to additional -- did the lists trigger any further inquiries? >> no i believe what happened is
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when they hit the paper we discussed it and we told people alive will go back for a moment, they can be relevant, but they certainly shouldn't be in every case they shouldn't be asked in every case because they can be relevant if they have a contract with the organization, if the voter is doing it for a political purpose, but to just ask for the donors without a rationale shouldn't be done. when we saw that it happened, we ask that if they hadn't sent them and we reach out and said don't send them in. if they did send them in, we said we are not going to use these and we didn't. you will find been used in many of these cases. there was something. i don't know how many there were maybe 30 or something is my understanding. i could be wrong on that more than half of those were not tea party cases that got these requests, by the way. but going back, it was overly
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broad. it wasn't necessary. >> thank you. i will last you the same question. in the cases where a the lists were requested was it your finding that those lists triggered further inquiries? >> i don't have an answer to that aspect of your question mr. smith i do know that 27 lists were requested. >> 27 were requested. >> correct. >> mr. miller, the safeguards against bias is a concern on the entire situation is that it was applied. can you share whether there were safeguards in place that were not honored to try to prevent the virus before the situation came about? >> so obviously i don't think -- again, what it was the perception of bias will play out over time. let me tell you that we have something on the exam that has
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worked remarkably well and that is before anybody gets selected for examination by reason of political activity it goes through a committee so no one person can do this and that cuts down. we do a better job of precisely explaining why we are doing it on a deterrent side, less so. so what we have done is elevated the issuance of the criteria to a higher level of the organization. >> thank you. >> i would point out of the 2713 from the tea party groups of the list. >> time is expired. mr. davis is recognized. >> thank you mr. chairman. i want to thank both of the gentlemen for being here. everybody that i've heard make a statement or comment, every reviewing body that has had an opinion has suggested that
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obviously there was some behavior on the part of senior level irs staff that was unwarranted, unacceptable and intolerable, and of course should never happen again. it's also clear that there of ben management challenges such as who has the authority to do what is relative to party as well as operational procedures. let me ask you when did you start the audit? >> it began with a request from congressional staff member, and i want to give you the exact date, sir, and i do have that here, march 1st 2012 is when we were initially contacted by a
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government reform staff member and the auditor began in roughly may or march rather of 2012. we had meetings prior to that but march of 2012. >> mr. miller, when did you first learn of the oddest or no? >> sometime in that timeframe that would have been in march when we certainly were aware that they were taking a look at this at some juncture in time. >> so you knew that this was under way pretty much from the beginning? >> i did. >> and did it ever occur perhaps to have certain kinds of conversations, interactions with whomever would be determined as your superiors?
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>> i'm sure mr. shulman new but i'm not sure anybody above him new. >> what the asked during your investigation we have heard all kinds of allegations. as a matter of fact some people have even been suggesting that a good thing to know is who is great to be the next person to go to jail, who is going to be indicted. during your investigation, was reported to you by any of your investigators that there was any apparent criminal intent or activity on the part of these employees? >> nothing out of the initial review of the audit to that
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effect, but there will be subsequent review on our part on this matter to the estimate after listening to all of the discussions and reading all of the information that i've read, i am not convinced that this is a great big political conspiracy i would certainly admit that there has been some ineptitude, they're has been a lack of serious management procedures used and adhered to. let me ask both of you since you've had considerable experience what would be your recommendations to the new commissioner coming in? >> there is no question that this is damaged the reputation
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of this organization and the new commissioner needs to take steps to ensure that we have restarted that trust that is so essentials and that's where he or she should take action. >> i would point out and this is one of the recommendations that we have made, training is necessary tall levels on their repeated basis of the staff, and especially in terms of the political season you have a lot of turnover especially at the lower levels, and people simply need to know to be kept informed up-to-date rather of the new regulations and requirements. >> thank you very much mr. chairman. mr. shocker is recognized. >> thank you mr. sherman. let me begin by saying i'm most concerned that they attempted to clean up and apologize for abusing the conservative organizations seeking the tax-exempt status is the
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proverbial pond tip of the iceberg. all irs is a reputation being above partisan politics that's been shattered by these revelations and these revelations now seem to be far from complete. at first they revealed the words to the party, patriots and a few other phrases triggered extra scrutiny. since then, more and more revelations have come to light. i have met with the 150 page document given to me by the thomas more society deutsch killing a number of pro-life organizations throughout the country which an application of the 501 thank you status were given portable instances of abuse of power, political and religious bias and a repression of the constitutional rights. i'm going to submit these documents dealing with these organizations went through to the treasury inspector general for the tax administration asking for the committee about the degree of abuse that these organizations received during their application for the tax-exempt status.
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i would like to just highlight a few of those reported abuses and ask for your opinion on them. in the letter from the office of xm organizations specialists in el monte california specifically the pacific coast division, i would note this is not in the cincinnati division to the christian voice is for life of the county in sugar land texas dated march 31st, 2011 that i have with me here today they were asked specifically and again this is a pro-life group come in your educational program, do you do education on both sides of the issues in your programs? your knowledge of the 501 seat reapplication is that an appropriate question to ask? >> i'm going to be honest and i'm not going to be able to speak to a specific development letter in a specific case. i don't know that i can do that under 61 and three. >> let me ask about another letter that was received, this one was